The
The Petitioner i.e.
The counsel for the Petitioner had made the following submissions:
- That the petitioner is a charitable society engaged in the business of technical and higher education and in order to set up the educational institutions, the petitioner had availed six term loans from the respondent/Bank out of which four term loans stand fully repaid in accordance with the restructured repayment plan.
- The Petitioner had also contended that even qua the remaining two term loans that were being referred to as term loans 'V' & 'VI', the petitioner had been diligent in making repayments in accordance with the restructured plan, but before the instalments payable in
March 2020 could be paid, the pandemic COVID had set in and consequently the RBI in order to ease the financial crises being faced by borrowers, has vide its circular datedMarch 27, 2020 provided a moratorium of three months in respect of all term loans as outstanding onMarch 1, 2020 . Hence, the petitioner majorly relied upon the regulatory measure issued by RBI onMarch 27, 2020 in view of which, a 90 days moratorium qua the instalments, which became payable afterMarch 1, 2020 must have been granted to it. Therefore, the Respondent cannot declare the petitioner's accounts as NPA on account of its failure to pay the instalments, which were payable on or beforeMarch 31, 2020 . - Additionally, the counsel of Petitioner further submitted that since the various Institutes run by the Petitioner were educational institutes situated in the
State of Uttar Pradesh , where the State Government has issued a specific directive prohibiting the petitioner from coercing the students to pay the due fees, the petitioner on account of its inability to collect or demand pending fees from the students, was not in a position to repay the instalments as payable inMarch 2020 qua the term loan V & VI.
Whereas, the counsel for the Respondent/Bank vehemently opposed to the grant of interim relief by primarily made the following submissions:
- That the moratorium as envisaged by the RBI is applicable only qua instalments which has became payable on or after
March 1, 2020 and not qua those which had become due prior toMarch 1, 2020 . Therefore, as per the restructured payment plan, the petitioner was liable to make payment of quarterly instalments, and the default qua instalments in respect of which the Respondent is proposing to declare the petitioner's accounts as NPA had already fallen due onDecember 31, 2019 and, therefore, the petitioner cannot take the benefit of moratorium envisaged by the RBI Circular DatedMarch 27, 2020 . in - The Respondent further contended that the Statement of Development Regulatory Policy dated
March 27, 2020 does not include any moratorium in cases of instalments which had already become due prior toMarch 1, 2020 . Additionally, the RBI's circular datedMarch 27, 2020 , on which reliance is being placed by the Petitioner, can in any event have overriding effect on a Regulatory Policy, which does not provide for deferment of an account being classified as NPA on account of the pandemic of COVID 19.
After hearing the contentions of both the parties the Hon'ble
The Hon'ble Court stated that:
"Any classification of the petitioner's accounts as NPA would certainly amount to altering the position as existing on
The Hon'ble Court has directed that till the next date, the Respondent/Bank are restrained from declaring the Petitioner's accounts as NPA. However, it has been made clear by the Court that if the directive issued by the
Footnotes
1 W.P.(C)2959/2020 & CM APPL.10272/2020 (for stay)
2 https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=11835&Mode=0
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